ndicted
ex-White House aide Lewis Libby played a key role in an earlier case of
slanting U.S. intelligence for political gain – four years before the
Iraq War when he was legal adviser to a House investigation into how
communist China got U.S. nuclear secrets.

In 1999, Libby, a China expert, served on a special
Republican-controlled House committee that laid the blame for the
compromise of U.S. secrets almost exclusively on Democrats, despite
evidence that the worst rupture of nuclear secrets actually occurred
during the Reagan-Bush administration in the mid-1980s.

The committee’s findings served as an important
backdrop for Election 2000 when George W. Bush’s backers juxtaposed
images of Democrat Al Gore attending a political event at a Buddhist
temple with references to the so-called “Chinagate” scandal.

The American public was led to believe that $30,000
in illegal “soft-money” donations from Chinese operatives to Democrats
in 1996 were somehow linked to China’s access to U.S. nuclear secrets.
Millions of Americans may have been influenced to vote against Gore and
for Bush because they wanted to rid the U.S. government of people who
had failed to protect national security secrets.

But the reality was that the principal exposure of
U.S. nuclear secrets to China appears to have occurred when Beijing
obtained U.S. blueprints for the W-88 miniaturized hydrogen bomb, a
Chinese intelligence coup in the mid-1980s on the watch of Ronald Reagan
and George H.W. Bush.

The intelligence loss came at a time when the
Reagan-Bush administration was secretly collaborating with communist
China on arms shipments to the Nicaraguan contra rebels, an operation so
sensitive that Congress and the American people were kept in the dark,
even as White House aide Oliver North colluded with Chinese agents.

The House report – with Libby as a top adviser –
obscured this central fact by setting up a timeline that placed nearly
all entries about compromised intelligence in the years of Jimmy
Carter’s or Bill Clinton’s presidencies. Only a close reading of the
report’s text would clue someone in on the actual timing of the W-88
leak to China.

Libby’s role in this earlier manipulation of
intelligence information for political gain is relevant after his Oct.
28 indictment for perjury, lying to FBI investigators and obstruction of
justice.

Those charges were leveled in connection with a
federal investigation into the outing of covert CIA officer Valerie
Plame in July 2003 after her husband, former Ambassador Joseph Wilson,
accused the Bush administration of “twisting” intelligence to justify
invading Iraq.

According to the five-count indictment, Libby
disclosed Plame’s identity to at least two reporters at a time when the
White House was trying to discredit Wilson, who had challenged a
dramatic claim of President George W. Bush’s case for war with Iraq,
that Saddam Hussein was seeking uranium for development of a nuclear
bomb.

Libby insisted that he had only circulated rumors
about Plame’s CIA employment that he had picked up from a journalist,
NBC’s Washington bureau chief Tim Russert. But the indictment said Libby
learned Plame’s identity not from Russert, but from a CIA official and
from Vice President Dick Cheney. Libby pleaded innocent on Nov. 3.

Scaring the Public

Warnings about “mushroom clouds” and Iraq’s alleged
pursuit of uranium had been memorable parts of Bush’s terrifying case
for war in 2002-2003. As Cheney’s chief of staff, Libby was an important
architect for both the war and the P.R. campaign that sold it to the
American people.

Several years earlier, in 1999, Libby had learned
in the “Chinagate” case how politically useful national security
accusations can be in scaring large segments of the U.S. population and
swaying the Washington press corps.

The “Chinagate” investigation, headed by Republican
congressmen Christopher Cox and Porter Goss, released an 872-page report
in three glossy volumes on May 25, 1999. Its unmistakable message was
that the Clinton administration had failed to protect the nation against
China’s theft of top-secret nuclear designs and other sensitive data.

Along with Libby, Dean McGrath served as the
investigation’s staff director. After George W. Bush became president,
McGrath joined Libby again in Cheney’s office, working as deputy chief
of staff. (Cox and Goss also joined the administration, with Cox as
chairman of the Securities and Exchange Commission and Goss as CIA
director.)

One sleight of hand used in the “Chinagate” report
was to leave out dates of alleged Chinese spying in the 1980s to obscure
the fact that the floodgates of U.S. nuclear secrets to China –
including how to build a miniaturized W-88 nuclear warhead – appeared to
have been open during the Reagan-Bush years.

While leaving out time elements for the Reagan-Bush
era, the report listed the years for alleged lapses during the Carter
and Clinton administrations.

For instance, the report’s “Overview” states that
“the PRC (People’s Republic of China) thefts from our National
Laboratories began at least as early as the late 1970s, and significant
secrets are known to have been stolen as recently as the mid-1990s.” In
other words, the report started with the Democratic presidency of Jimmy
Carter and then jumped over the 12 years of Reagan and George Bush Sr.
to Clinton’s administration.

In the report’s “Overview” alone, there are three
dozen references to dates from the Clinton years and only five mentions
of dates from the Reagan-Bush years, with none of those citations
related to alleged wrongdoing.

In a two-page chronology – pages 74-75 – the report
puts all the boxes about Chinese espionage suspicions into the Carter
and Clinton years. Nothing sinister is attributed specifically to the
Reagan-Bush era, other than a 1988 test of a neutron bomb built from
secrets that the report says were believed stolen in the “late 1970s,”
the Carter years.

Only a careful reading of the text inside the
chronology’s boxes makes clear that many of the worst national security
breaches came on the Reagan-Bush watch.

For instance, a box for 1995 states that a
purported Chinese defector walked into a U.S. government office in
Taiwan that year and handed over incriminating Chinese documents. While
that would seem to apply to a Clinton year, the documents actually
showed that Chinese intelligence may have stolen the W-88 secrets
“sometime between 1984 and 1992,” Reagan-Bush years.

The Chinese tested their miniaturized warhead in
1992 while George H.W. Bush was president. In other words, it was
impossible that the Clinton-Gore administration, which started in 1993,
could have been responsible for this security breach.

Spy Suspect

Left out of the chronology also was the fact that
suspicious meetings with Chinese scientists – that made Los Alamos
scientist Wen Ho Lee an espionage suspect – took place from 1985 to
1988, while Reagan was president.

When released in May 1999, in the wake of Clinton’s
impeachment and Senate trial, the “Chinagate” report was greeted by
conservative groups and the national news media as another indictment of
the Clinton administration. By then, the Washington press corps was
obsessed with “Clinton scandals” and viewed virtually all allegations
through that prism.

Yet, despite the intensity of the media spotlight, little attention
was paid to the shallowness of the “Chinagate” report.

The report certainly didn’t resemble the typical green- or
beige-bound congressional report. In a shiny black-red-white-and-gold
cover, the report used 14-point type, more fitting for a first-grade
reading primer than a government document. [By comparison, most
congressional reports use 10-point type or smaller.]

Space also was taken up by large graphics, including one page devoted
to a photo of a mushroom cloud. Other pages were given over to colorful
graphs and shaded boxes defining simple intelligence terms, such as a
“walk-in.” Some pages at the start of chapters were entirely black for
dramatic effect.

Though the report fed the post-impeachment Clinton
scandal fever, cooler heads began to prevail in June 1999. A study was
issued by the President’s Foreign Intelligence Advisory Board – chaired
by former Sen. Warren Rudman, R-N.H. – concluding that Chinese spying
was less than had been “widely publicized.”

Still, the fallout from the spy hysteria continued.
The 60-year-old Wen Ho Lee was imprisoned on a 59-count indictment for
mishandling classified material. The Taiwanese-born naturalized U.S.
citizen was put in solitary confinement with his cell light on at all
times. He was allowed out only one hour a day, when he shuffled around a
prison courtyard in leg shackles.

Nine months later, the case against Wen Ho Lee
began to collapse and the government accepted a plea bargain on Sept.
13, 2000. The scientist pleaded guilty to a single count of mishandling
classified material.

Reagan-Bush Lapses

New evidence also pointed
to the fact that the hemorrhage of secrets to China traced back to the
Reagan-Bush years. After translating more documents from the Chinese
defector who had approached U.S. officials in 1995, federal
investigators found that the exposure of nuclear secrets in the 1980s
had been worse than previously thought.

“The documents provided
by the defector show that during the 1980s, Beijing had gathered a large
amount of classified information about U.S. ballistic missiles and
reentry vehicles,” according to an article in the Washington Post on
Oct. 19, 2000.

Still, the “Chinagate” report’s suspicions about
Clinton-Gore treachery lingered. During
Campaign 2000, a pro-Bush conservative group aired an ad modeled after
Lyndon Johnson’s infamous 1964 commercial that showed a girl picking a
daisy before the screen dissolved into a nuclear explosion.

“Chinagate” – and the repetitive use of video of
Gore among saffron-robed monks – proved important in enabling Bush to
keep Election 2000 close enough so the intervention by five Republicans
on the U.S. Supreme Court, stopping a Florida recount, could hand him
the victory.

On Feb. 4-5, 2001, two weeks after Bush took
office, the New York Times published a retrospective on the Wen Ho Lee
case. A detailed chronology demonstrated that
the suspected loss of nuclear secrets dated back to the Reagan-Bush
administration.

The Times reported that
limited exchanges between nuclear scientists from the United States and
China began after President Carter officially recognized China in 1978,
but those meetings grew far more expansive and less controlled during
the 1980s.

“With the Reagan
administration eager to isolate the Soviet Union, hundreds of scientists
traveled between the United States and China, and the cooperation
expanded to the development of torpedoes, artillery shells and jet
fighters,” the Times wrote. “The exchanges were spying opportunities as
well.”

Ollie's Mission

But the full story of the
Republican-Chinese collaboration was even darker than the Times
described.

By 1984, Ronald Reagan’s
White House had decided to share sensitive national security secrets
with the Chinese communists as it drew Beijing into the inner circle of
illicit arms shipments to the Nicaraguan contra rebels.

Reagan’s White House
turned to the Chinese for surface-to-air missiles for the contras
because the U.S. Congress had banned military assistance to the rebel
force and the contras were suffering heavy losses from attack
helicopters deployed by Nicaragua’s leftist Sandinista government.

Some of the private U.S.
operatives working with White House aide Oliver North settled on China
as a source for SA-7 anti-aircraft missiles. In testimony at his 1989
Iran-Contra trial, North called the securing of these weapons a “very
sensitive delivery.”

For the Chinese missile
deal in 1984, North said he received help from the CIA in arranging
false end-user certificates from the right-wing government of Guatemala.
North testified that he “had made arrangements with the Guatemalan
government, using the people [CIA] Director [William] Casey had given
me.”

But China balked at
selling missiles to the Guatemalan military, which was then engaged in a
scorched-earth war against its own leftist guerrillas. To resolve this
problem, North was dispatched to a clandestine meeting with a Chinese
military official.

The idea was to bring the
Chinese communists in on what was then one of the most sensitive secrets
of the U.S. government: the missiles were not going to Guatemala, but
rather into a clandestine pipeline arranged by the White House to funnel
military supplies to the contras in defiance of U.S. law.

This was a secret so
sensitive that not even the U.S. Congress could be informed, but it was
to be shared with communist China.

In fall 1984, North
enlisted Gaston J. Sigur, the NSC’s expert on East Asia, to make the
arrangements for a meeting with a communist Chinese representative,
according to Sigur’s testimony at North’s 1989 trial. “I arranged a
luncheon and brought together Colonel North and this individual from the
Chinese embassy” responsible for military affairs, Sigur testified.

“At lunch, they sat and
they discussed the situation in Central America,” Sigur said. “Colonel
North raised the issue of the need for weaponry by the contras, and the
possibility of a Chinese sale of weapons, either to the contras or, as I
recall, I think it was more to countries in the region but clear for the
use of the contras.”

North described the same
meeting in his autobiography, Under Fire. To avoid coming under
suspicion of being a Chinese spy, North said he first told the FBI that
the meeting had been sanctioned by national security adviser Robert C.
McFarlane.

“Back in Washington, I
met with a Chinese military officer assigned to their embassy to
encourage their cooperation,” North wrote. “We enjoyed a fine lunch at
the exclusive Cosmos Club in downtown Washington.”

North said the Chinese
communists saw the collaboration as a way to develop “better relations
with the United States.” Knowing about the illicit shipments to the
contras also put Beijing in position to leverage U.S. policy in the
future.

It was in this climate of
cooperation that other secrets, including how to make miniaturized
hydrogen bombs, allegedly reached communist China.

Though the evidence of
North’s secret contacts with Chinese intelligence had been public
knowledge since the late 1980s, the “Chinagate” report in 1999 made no
reference to this secret collaboration between Reagan’s White House and
China.

Enter Wen Ho Lee

Wen Ho Lee came to the
FBI’s attention in 1982 when he called another scientist who was under
investigation for espionage, according to the New York Times chronology.

But Lee’s contacts with
China – along with trips there by other U.S. nuclear scientists –
increased in the mid-1980s as the Reagan-Bush administration turned to
China for help getting weapons to the contras.

In March 1985, Lee was
seen talking with Chinese scientists during a scientific conference in
Hilton Head, S.C. The next year, with approval of Los Alamos lab
officials, Lee and another scientist attended a conference in Beijing.
In 1988, Wen Ho Lee attended another conference in Beijing.

It was sometime during
this period of physicist-to-physicist contacts when China is believed to
have gleaned the secret of the miniaturized W-88 nuclear warhead.

“On Sept. 25, 1992, a
nuclear blast shook China’s western desert,” the Times wrote. “From
spies and electronic surveillance, American intelligence officials
determined that the test was a breakthrough in China’s long quest to
match American technology for smaller, more sophisticated hydrogen
bombs.”

In September 1992, George
H.W. Bush was still president.

In the early years of the
Clinton administration, U.S. intelligence experts began to suspect that
the Chinese nuclear breakthrough most likely came from purloined U.S.
secrets.

“It’s like they were
driving a Model T and went around the corner and suddenly had a
Corvette,” said Robert M. Hanson, a Los Alamos intelligence analyst, in
early 1995, the Times reported.

Looking for possible
espionage, investigators began examining the years of the mid-1980s when
the Reagan-Bush administration had authorized U.S. nuclear scientists to
hold a number of meetings with their Chinese counterparts.

Though the American
scientists were under restrictions about what information could be
shared with the Chinese, it was never clear exactly why these meetings
were held in the first place – given the risk that a U.S. scientist
might willfully or accidentally divulge nuclear secrets.

Impeachment Time

But the Chinese-espionage
story didn’t gain national attention until March 1999 when the New York
Times published several imprecise front-page stories fingering Wen Ho
Lee as an espionage suspect. This “Chinagate” story broke just weeks
after Clinton’s impeachment and Senate trial for lying about sex with
Monica Lewinsky.

With Clinton acquitted by
the Senate, the Republicans and the news media were eager for another
“Clinton scandal.” To get this fix, they brushed aside the timing of the
lost secrets – the 1980s – and mixed together the suspicions about
Chinese spying and allegations of Chinese campaign donations in 1996.

During those chaotic
first weeks of “Chinagate,” pundits ignored the logical impossibility of
Democrats selling secrets to China in 1996 when China apparently
obtained those secrets a decade earlier during a Republican
administration.

The House investigative
report, with China expert Lewis Libby as a senior staff aide, added
powerful fuel to the anti-Clinton fire. Conservative groups immediately
grasped the political and fund-raising potential.

Larry Klayman’s
right-wing Judicial Watch sent out a solicitation letter seeking $5.2
million for a special “Chinagate Task Force” that would “hold Bill
Clinton, Al Gore and the Democratic Party Leadership fully accountable
for election fraud, bribery and possibly treason in connection with the
’Chinagate’ scandal.”

“Chinagate involves
actions by President Clinton and Vice President Gore which have put all
Americans at risk from China’s nuclear arsenal in exchange for millions
of dollars in illegal campaign contributions from the Communist
Chinese,” Klayman’s letter said.

But the ultimate payoff
to Republicans for this twisting of history came in November 2000, when
possibly millions of Americans went to the polls determined to throw out
the Clinton-Gore crowd for selling nuclear secrets to communist China.

That impression was
anchored in the public mind by the House committee’s three-volume
report, which had selectively presented the case and steered away from
evidence that implicated the administrations of Ronald Reagan and George
H.W. Bush.

The irony was that these
American voters, eager to expel the Democrats for compromising nuclear
secrets to China, actually let back in the Republicans who were much
more deeply implicated in the offense.

But Lewis Libby had
learned an important lesson – fears of foreign dangers could move the
American people in a desired direction, as long as the information was
carefully tailored and controlled.

Robert Parry broke many of the Iran-Contra
stories in the 1980s for the Associated Press and Newsweek. His latest book, Secrecy & Privilege: Rise of the Bush Dynasty from
Watergate to Iraq, can be ordered at
secrecyandprivilege.com. It's also available at
Amazon.com, as is his 1999 book, Lost History: Contras, Cocaine,
the Press & 'Project Truth.'

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